C.L. Ygartua: Accessing new oil reserves will take years, be costly

Posted: Friday, June 13, 2008

Domestic oil production peaked in the mid-1960s. We were producing eight million barrels per day, primarily from land wells in the lower 48 states. This production represented about 75 percent of our daily consumption. The balance was provided from oil-producing nations at a cost of about $2 per barrel. We were living and growing and got addicted to cheap fuel.

Since that time, we have discovered the super-giant Prudhoe Bay field in Alaska as well as several giant fields in the Gulf of Mexico. Increases in the price of oil have allowed us to drill in deeper and harsher environments, but in spite of these major discoveries, our current oil production has fallen to 5.18 million barrels per day. We now import about 75 percent of our oil.

Yes, we have discovered some new major reserves in the Gulf of Mexico, and there are possibly discoveries to be made in offshore Arctic waters. And, yes, they can be safely drilled and produced, but at great cost and over an extended time period.

Getting to that oil will require drilling in 5,000 feet to 10,000 feet of water, then drilling another 10,000 feet to 20,000 feet in rock, and that's just the beginning. Wellheads, pumps, compressors and pipelines must be installed and maintained in the seabeds, all remotely operated from surface facilities subject to hurricanes. Industry engineers estimate it would take 10 or more years to develop just the equipment required.

Energy alternatives are problematic from the environmental, transportational and efficiency perspectives. Expensive energy is probably here to stay.

C.L. Ygartua

Ygartua has been a member of the Society of Petroleum Engineers for more than 40 years